AMLA’s February 2026 consultation on draft Regulatory Technical Standards (RTS) under Article 28(1) of Regulation (EU) 2024/1624 marks a significant step in operationalising a harmonised approach to customer due diligence across the European Union. The proposals are not merely incremental: they materially tighten expectations on identification, source of wealth and source of funds, as well as ongoing monitoring, particularly for complex and cross-border clients. They give us a glimpse of what is to come and it is already worth having a look at the direction of travel for compliance obligations so regulated business can prepare for the future.
For Monaco-based obliged entities, the implications are more nuanced. In many respects, Monaco already operates with a more conservative and documentary compliance culture, especially in private wealth, structuring and TCSP environments. The impact of the draft RTS therefore lies less in introducing entirely new or stricter concepts than in formalising evidential standards, enhancing comparability, and aligning expectations across EU counterparties.
From principle to implementation: the key role of RTS
This development is part of a broader transformation. The move from a directive-based framework to a directly applicable regulation reflects a clear EU objective: reducing national divergences and establishing a common operational baseline. This is a good thing for businesses.
The RTS play a central role in this shift. They do not create the obligation, but define how it must be applied in practice:
- what information must be collected;
- how it must be verified;
- and under what conditions it must be updated.
This higher level of precision transforms compliance into a far more structured exercise, and one that is significantly easier for supervisors to assess, and a clearer operational environment for businesses.
Monaco: outside the scope, but not outside the influence
Although Monaco is not directly subject to this framework, it is not disconnected from it.
Under the Monetary Agreement with the European Union, the Principality is required to maintain substantive equivalence with EU AML/CFT standards, implying continuous adaptation to regulatory developments without necessarily requiring formal transposition.
In practice, this means that AMLA standards will increasingly shape:
- supervisory expectations;
- relationships with EU counterparties;
- and, more broadly, the perception of Monaco’s regulatory framework.
A risk-based approach, but more tightly framed
One of the key contributions of the draft RTS is to reaffirm the risk-based approach while framing its application more precisely.
The text specifies that the intensity of due diligence measures must be proportionate to the level of risk associated with the customer, the relationship or the transaction. In lower-risk situations, certain information, including source of funds, is required only where necessary.
This is a critical point. It confirms that the EU model remains risk-based and graduated. At the same time, it introduces a new requirement: the need to clearly demonstrate why a given level of due diligence is considered sufficient.
Source of funds and wealth: from narrative to demonstrable analysis
This evolution is most visible in the treatment of source of funds (SoF) and source of wealth (SoW).
The draft RTS do not impose a rigid checklist, but they structure expectations in terms of evidence. In enhanced due diligence scenarios, firms must be able to demonstrate, based on reliable and independent sources, that funds and wealth derive from legitimate activities.
The text refers in particular to:
- tax declarations;
- income documentation;
- audited accounts;
- investment or financing documents;
- property records or sale agreements;
- and information obtained from independent sources.
For Monaco-based actors, these elements are familiar. The key change lies in how they are used: source of wealth can no longer be treated as a descriptive element, but must be embedded in a coherent and demonstrable analysis linking:
- the client’s profile;
- the structure used;
- the expected activity;
- and the risk level assigned.
Beneficial ownership and structures: understanding beyond documentation
The draft RTS also strengthen expectations regarding beneficial ownership.
They make clear that consulting central registers is necessary but not sufficient. Firms must take additional steps to verify beneficial owners and understand the control structure.
In complex structures, particularly those involving multiple layers, cross-border elements or reduced transparency, firms must be able to:
- reconstruct the ownership chain;
- identify key stakeholders;
- understand the economic rationale of the structure;
- and, where relevant, represent it clearly (for example through an organisational chart).
In a jurisdiction such as Monaco, where such structures are common, this reinforces the need for substantive and well-documented analysis.
The draft RTS also provides a useful clarification regarding the identification of natural persons.
Recital 3 confirms that obliged entities should collect information on the customer’s nationality and place of birth. However, where a customer holds multiple nationalities and declares them in good faith, verifying only one nationality may be considered sufficient. This is different to the current Monaco position.
This distinction between collection and verification reflects a pragmatic approach by the European legislator, aiming to strike a balance between compliance requirements and operational proportionality.
CDD as a continuous process
The draft RTS also brings important clarification regarding the periodic updating of customer information.
Recital 25 introduces maximum periods for updating customer data, set at 1 year for higher-risk relationships and up to 5 years for other situations.
This clarification is noteworthy. It does not reflect a tightening of requirements as such, but rather an effort by the European legislator to introduce a more structured framework while preserving a risk-based approach. These timeframes should be understood as upper limits rather than fixed review cycles, leaving obliged entities with a degree of discretion in determining the appropriate review frequency based on the customer’s risk profile.
In practice, this illustrates that, while the European framework is becoming more structured, it also retains a level of operational flexibility, particularly when compared to more prescriptive supervisory expectations in certain jurisdictions.
Remote onboarding: a key point of attention for Monaco
The draft RTS establish a stricter hierarchy for remote identification.
They prioritise the use of eIDAS-compliant electronic identification solutions at substantial or high assurance levels, allowing alternative solutions only on a fallback basis and subject to justification. Monaco currently has a different framework for identification at a distance, and approved compliant remote onboarding systems are lacking.
For Monaco, the issue is not the absence of remote onboarding frameworks, but their alignment with the emerging European model.
Over time, EU counterparties may require:
- explanations of the assurance level of the solutions used;
- evidence of their reliability;
- and implicit comparison with AMLA standards.
What are the practical implications for Monaco-based actors?
The impact of the draft RTS cannot be reduced to a simple tightening of rules. It reflects a shift in how compliance is assessed.
In practical terms, this translates into:
- increased convergence pressure toward EU standards;
- more structured and readable compliance files;
- a shift from document volume to evidential quality;
- deeper scrutiny of complex structures;
- and stronger integration between onboarding and ongoing monitoring.
Toward more demonstrable and comparable compliance
The AMLA RTS do not represent a radical break with existing practices in Monaco. In many cases, the level of requirement is already high.
However, they clearly signal a move toward:
- harmonisation;
- standardisation;
- and comparability.
For Monaco-based actors, the challenge is now twofold: preserving the strength of existing practices while adapting them so that they are fully understandable and defensible within this new EU framework.
How Rosemont Can Assist
Rosemont International supports clients in adapting to evolving AML/CFT standards, including through:
- the structuring of CDD frameworks and source of funds and wealth analysis aligned with EU expectations;
- the preparation of robust and demonstrable files for HNWIs and complex structures;
- advisory on Monaco–EU regulatory convergence;
- and support for private wealth actors, family offices and international structures.
For clarification: the consultation is open until 8 May 2026, while the AMLR will enter into application on 10 July 2027, leaving a limited timeframe to adapt KYC frameworks.
At this stage, the text remains a draft subject to change, and the RTS will enter into force under a separate timeline that has yet to be determined.
For more information, please contact office@rosemont-mc.com
Follow us on LinkedIn and don't miss our updates about Monaco, Malta, Mauritius, and the yachting industry.